It's all in a name

Steve Rosenbush

Now that the Justice Department has approved SBC's purchase of AT&T, SBC has taken the name of its newly acquired (and former corporate parent) AT&T. The new AT&T was inevitable. (We wrote about this coming change more than a month ago. Link.)

Is SBC putting the old Bell System back together? No. The times are different. The Web and wireless phone service weren't available when the Justice Department ordered breakup of AT&T in 1983. The residential and business telecom markets were near monopolies, a little competition from the likes of MCI notwithstanding. But the reintegration of SBC and AT&T and the integration of Verizon and MCI reaffirm the telecom market's need for scale and scope. The decision to adopt the AT&T name is a reminder of how things work.

And my guess is that it won't be long before we see more parts of the old Bell System reintegrated. Best bet: SBC won't waste any time trying to acquire BellSouth. That would eliminate conflicts between SBC and BellSouth, which are joint owners of wireless giant Cingular. Now that SBC owns AT&T, it will be competing with its partner for big corporate accounts like Coca Cola, which is based in BellSouth territory. With little resistance in Washington in sight, the only significant obstacle would be a possible counter offer from Verizon.

Neither company is likely to acquire US West whole. But a few markets such as Seattle and Denver might be of interest, especially to SBC. And the remaining rural markets in US West territory could be ripe for acquisition by private equity players or a big independent telecom company.

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